Shares of most US-listed shipowners fell into red numbers in pre-market trading on Wednesday after the Donald Trump-led Republican sweep in the US political elections.
This ran counter to the direction of the broader stock indices, as Dow futures soared 3%, while both the S&P 500 and Nasdaq gained roughly 2% in the pre-market.
Concerns for the shipping stocks range from the possible unwinding of “disruption” trading that has buoyed some sectors in 2024 — as Trump favours quick resolution of the Russia-Ukraine conflict — to the possibility he will honour campaign pledges by entering a tariffs war with China.
Israeli liner company Zim, one of the more volatile shipping stocks trading in New York, stumbled more than 8% in the hour before trading began on the New York Stock Exchange.
Crude tanker bellwether Frontline shed more than 2%, while clean product giant Scorpio Tankers fell about 1%.
VLCC specialist DHT Holdings was a gainer at 1.6%. But diversified tanker owner International Seaways dropped about 0.4%.
Hafnia, another big trader in the clean petroleum markets, shed more than 6%.
On the dry side, sector leader Star Bulk Carriers gave up more than 2%.
In the gas trade, which is seen as a possible beneficiary of a Trump presidency, Golar LNG shares moved up nearly 2%, while Dorian LPG added about 0.5%.
“A new Trump presidency is likely to impact the shipping sector in differing ways with the ongoing Russia-Ukraine war and Israel-Hamas conflict perhaps now having scope for a quicker resolution,” said Jefferies lead shipping analyst Omar Nokta in a note to clients.
Republicans will control the White House, the Senate, the Supreme Court and likely the House of Representatives, giving Trump’s policies a clear path, he noted.
“The Russia-Ukraine war has been supportive for tankers while easing sanctions on Iran has been negative. Should these reverse, it is likely that the tanker balance-of-power would shift more towards VLCCs versus the midsize segments,” Nokta wrote.
